DENVER (MainStreet) - As Colorado celebrates its first year of legal weed that fueled a construction and real estate boom, industry leaders predict that 2015 will be a year that other states look to the state for expertise in everything from banking to energy consumption as the industry grapples with growing pains.
Ganjapreneurs in Colorado — the first state to legalize weed for recreational use — boast valuable expertise and will expand their work to other recreational markets coming online such as Washington, Oregon, Nevada and Alaska. These players will position themselves as industry names.
Making better use of new technology, particularly as it relates to energy consumption, will be critical to the cannabis industry in the coming year. LED lighting will gain more acceptance as the technology evolves and interest in reducing energy consumption increases.
“We have been waiting for this technology to prove itself with yields comparable to, or better than, traditional HPS lighting and the results seem to be coming in,” said Nathan Mendel of Your Green Contractor Inc. “We expect to see large-scale changes to these fixtures so growers can capitalize on the significant energy savings and cooling reductions available.”
With the adoption of 2015 International Energy Conservation Code, Denver and other municipalities are providing some exemptions from energy consumption regulation for cannabis trades, but should not be exempt from being good stewards of the environment, said Kim Robertson, senior marketing manager for MKK Consulting Engineers. It’s also likely that rebates will be available as Xcel looks for ways to reduce the burden on the electrical grid that the number of grows in Colorado is causing.
“Due to high energy consumption and demand among the cannabis industry businesses, the need for more sustainable building practices and design is crucial in 2015,” Robertson said. “Proper energy-efficient design should still be taken into account at all aspects of the project.”
The marijuana industry is still limited to doing business in cash, though the Fourth Corner Credit Union is expected to learn soon whether the Federal Reserve will issue it a master account number allowing its clients access to the first electronic banking system for the cannabis industry.
“There will be progress in 2015,” said Chris Myklebust, Colorado’s financial services commissioner. “The states will continue to take the lead in expanding legal, regulatory and taxation models for cannabis-related businesses. Congress will begin to have some substantive discussions about marijuana, especially medical marijuana, but I don’t envision the wave of interest needed to promulgate or pass meaningful legislation at the federal level during the year.”
Existing financial institutions also are likely to explore serving the marijuana industry, but progress will be slow, because federal guidance is not a substitute for federal law and banks add risk slowly regardless of the line of business, Myklebust said.
As a new industry, it’s important for the marijuana sectors in other states to implement best practices, and Colorado will be the leader in this effort.
“In 2015, we will see new dispensaries — both medical and recreational — in several states and more instances of successful dispensary brands and teams crossing state lines and opening up new locations in new markets,” said Megan Stone, owner of The High Road Design Studio and an interior decorator specializing in marijuana dispensaries.
Nathan Mendel of Your Green Contractor Inc. predicts mergers and acquisitions in the marijuana sector that will benefit the architectural, engineering and construction industries.
“We are seeing a lot of new investments coming into the industry as the capital markets begin to understand the potential of this industry,” Mendel said. “In many cases, these new players are looking to get in a quickly as possible, which often leads them to purchase an existing operation. This means plenty of opportunity to remodel outdated or inefficient spaces as these investors look to maximize their returns.”
--Written by Margaret Jackson for MainStreet